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WOLSTEIN & CLEVELAND'S LONG WINTER OF DISCONTENT

Submitted by Roldo on Thu, 01/22/2009 - 11:17.

It’s an untidy and greedy free for all. Grab while you can. If you can. So why shouldn’t Scott Wolstein – whose grandiose Flats development has hit a frigid stall despite huge promised public subsidies – enter the messed up deal on the medical mart and convention center issue. Confusion may be the mark of bad planning, poor communications and lack of leadership and, quite frankly, an economy in a seemingly permanent dump. However, chaos seems to suit our so-called Leadership. I’m talking about the latest twist in the fiasco of the Cuyahoga County Commissioners and their attempt to foist a convention center on the taxpayers. It’s messy to watch. Wolstein, whose multi-million dollar development is as frozen our weather, hopes to grab a bunch more public dough by trying to thaw his Flats project with an infusion of another public project. The Wolsteins have always been a third-rate political power in Cleveland until recently. That means well behind Sam Miller and Al Ratner of Forest City and, of course, Dick Jacobs – who at this time has gotten all he can handle from our politicians. The Wolsteins believe now is their time. The Plain Dealer story this morning notes that Wolstein’s “pitch has piqued the interest of Merchandise Mart Properties Inc. (MMPI)” and that’s no wonder since MMPI appears unable to pull off this venture. MMPI’s deal is heavy with public subsidies but it still can’t seem to get the monster off the ground. MMPI seems at a dead end. The PD’s flurry of attention indicates that there’s plenty of hand-wringing over the inability to bring this project to fruition. Power shifts over the years. Going back to the 1970s Art Modell was a big cheese but he failed to keep his political benefactors happy. He got outmaneuvered by politician-generous Jacobs. Modell had to leave town and find new suckers in Baltimore. Now it looks as if Wolstein is trying to nudge Sam and Al out of the action – maybe out of town, too - by taking the med mart and convention center sugar pot away from them. Sam and Al, of course, want the deal on their land. They also want $40 million for the land some call a cliff. The problem, of course, is that neither development offers the public what it needs or deserves as they tries to take more $1 billion in taxpayer money over 20 years. If you want a rundown of what Cleveland and other governmental bodies have offered as subsidies to Wolstein’s Flats project check the end of this previous column on his Flats project: http://www.lakewoodbuzz.com/RoldoBartimole/RB%2005-03-06_Flats_Deal_Disg...

Let's make this very clear and personal. In the PD today was published "Vapor-Plans" - fraudulent, bull-shit images of something not plannned, or designed, or even thought through by anyone at all, other than a real estate developer... in this case the clearly psychotic Wolstein... yet "validated" by professional architects, with budgets, including rail and station relocation costs... and that all validated by only one source, being the Clevelent Plain Dealer, which published the vapor plans, which are by Forum Architects, which provided architecture services for the Plain Dealer.

Pure fraud to divert public funds to private interests, including friends of the Plain Dealer. Talk about inside dirty dealing...

Eventually some of these people must go to jail, and I'm working on the cases against each and every one of them here on REALNEO.

Wolsteins, people at Forum Architects, and people at the Cleveland Plain Dealer., understand Obama's words, and you certainly know which apply to your sorry asses.

So, what is the process for completely changing development plans when you have millions of dollars of public money? Does Wolstein lose public funding if he does not create what he promised? Does the public get to weigh in on this at all?

"Sewer district trustees are considering paying nearly $5 million more than planned to complete the Flats East Bank sewer project, even though it's unclear if a planned neighborhood will ever be built.

The Northeast Ohio Regional Sewer District had earlier agreed to pay $8 million of the sewer overhaul to coincide with developer Scott Wolstein's $522 million residential, retail and office development on the east bank of the Flats.

Developers Wolstein and Fairmount Properties of Cleveland originally agreed to pay additional costs for the sewers, which amounted to about $5 million."

Last week I did something I have not done for than two years and hope not to have to do it again.

I went to a Monday afternoon Finance Committee meeting at ClevelandCity Council. Members were presented details of a project of a couple of hundred million dollars for the East Bank of the Flats.

The faces of members have changed somewhat but the activities have not changed at all.

It’s still a legislative body lacking in the badly required discrimination when giving away public money.

Moreover, with the city administration boosting a wealthy private developer, the hearing remained as always a dance of fakers on all sides.

After watching the show, my estimation of Mayor Frank Jackson has diminished considerably. The administration’s due diligence on this financially troubling deal leaves much to be desired.

Further, the once refreshing, now characterless Joe Cimperman, in whose ward the project will be, has now diminished to a hack politician going nowhere good.

After the meeting, I approached freshman Council President Martin Sweeney, always graciously solicitous, and said, “You’re worse than George Forbes. You’re a dictator.” Now, I exaggerated a bit.

However, Sweeney ran the three-hour, hurried meeting that essentially gave developers unknown millions of dollars in subsidies with little probing. The public cost, as you will see below, is immense and mostly unknown.

Sweeney took care to keep colleagues in the dark, releasing a 57-page report to members sometime on Friday, probably after many had left for the weekend. The meeting was scheduled at 1 p.m. Monday.

Sweeney, and his boss, Mayor Frank Jackson, likely figured most - if not all - would not have the time to decipher a 57-page legal document.

They were right.

Allowing no time for consideration is an old leadership trick, docilely accepted by Sweeney’s 20 colleagues. Maybe it will be a lesson learned by some of the new members. They need to review their participation in these decisions.

The Flats developer – the Wolstein Group and Fairmount Properties (fka, CenterPoint Properties... remember them, West End of Lakewood?) via a limited partnership of the two – places the entire development cost at $230 million. We will be able to track the government subsidies. It is unlikely that will be true at all of private investment.

We also can expect changes, including the possibility Wolstein wants control of the property with the option of some kind of gambling or casino operations in mind. No restriction is in the deal.

It was said that the developers controlled some 60 or 70% of the project area but, if you included Phase 2, Wolstein only owns some 37%, (and some believe even less) if you are ready to accept anything from the developer’s mouth.

A piece of property to be taken by eminent domain for Phase 2 includes a large parking lot. It will remain parking in the Wolstein development as it is now. That led Councilman Mike Polensek to puzzle...“Take a parking lot to make a parking lot?”

Slippery Steve Strnisha had a quick-tongued non-answer: “It’s important for single management and ownership” of the property.Government now serves private interests more than public interests, as this double-dealing deal so well conveys.

To oppose the project would be to oppose “progress.” This is not allowed. Don’t be negative. The Pee Deewill editorialize against you and ruin you. That’s why the deal was approved that night quietly and unanimously.

Sweeney allowed Council members – on this give-away one member called “fast tracked” – 10 minutes of questioning time. Strictly enforced; obediently obeyed. The time allotted included the answers to the posed questions. Fast tracked? This little engine was bullet train expressed. (Sweeney did allow another 10 minutes if needed. Only two members took up some extra time.)

Sweeney also rushed the decision by having the meeting – which included a number of Council committees in addition to Finance – on an afternoon when Council members were scheduled to take a bus tour of various neighborhoods at 4:30p. m.

Now, George Forbes would have used another tactic. He would have the committee meeting drag on for hours and hours with the same result.

When Sweeney read off the four pieces of legislation and asked, “Any objection,” not a member of any committee, even those who had been critical, uttered a word.

Strnisha, former city finance director, now an executive with GreaterClevelandPartnership (ClevelandTomorrow plus), was there selling the multi-million dollar give-away.

Someone prompted a council member to ask the question...“Are you the same Steve Strnisha that sold the Gateway garages to Council on the prediction it would make money for the city?”

Actually, the two garages are set to lose $77 million, despite Strnisha’s exuberant support before Council.

It was Slippery Strnisha, back for another oily performance.

He was accompanied in the selling by Ken Silliman, formerly with the White administration and now chief of staff for Mayor Jackson. Silliman predictably gave his firm affirmation that this was a good deal for the city.

Anybody got a bridge to sell?

They’re such good soldiers. Peddling what they’re told to sell. Let the taxpayer beware.

You could tell that lots of money was on stage for the taking. The publicrelations line-up was impressive. There was Tom Andrzejewski standing aside Joe Rice – both ex-Pee Dee reporters turned to PR and, of course, the always versatile Nancy Lesic (remember her, Lakewood?), there with a trifecta of conflicts. She represents developer Wolstein, City Council, and the Cleveland-CuyahogaCountyPortAuthority.

The Port Authority, by the way, now should be known by its more apt name, the Bank of Developers Open House for Subsidies or (BDOHS).

Others with monetary interests flooded the Council hearing room.

Sitting in the front row were former school board member (and a lot of other things) Ken Seminatore, former Brookpark Mayor Tom Coyne, political operative and landowner Tony George, and former Cleveland Councilwoman and mayoral candidate Helen Smith, lobbying their interest in the future of the Flats.

That foursome wants more money to go from Wolstein to owners of more than one-third of the property Wolstein wants to gobble with the help of BDOHS, which will provide eminent domain powers.

Another Flats operator, Larry Flynt, yeah, that one, wasn’t there. A story going around, however, suggests that Wolstein offered him more than $1 million for his Flats property. Flynt’s response...“I didn’t come to Clevelandto make a million dollars. I came to Clevelandto make MILLIONS.”

He’s in the right spot.

What does the money deal look like? As you might expect in desperateSubsidyCity, really horrible. An open checkbook to a wealthy developer.

- Tax-exempt infrastructure bonds estimated to be $9 million are secured by annual payments by the Northeast Ohio Regional Sewer District.

- The sum of approximately $4,550,000 will be made available through theFederal HighwayAdministration.

- The federal government has appropriated and the city shall obtain and make available when required for eligible project costs a grant of $1,464,735 from the U. S. Department of Commerce National Oceanic Atmosphere Administration (NOAA grant).

- All rental and condominium units (some 300 units) will be tax abated at 100% for 15 years. No cost estimate given by the city, port authority or county.

- The city agrees to enact legislation as necessary to amend and extend the CRA residential tax abatement program to assure that all residential improvements are eligible for the full 15-year, 100%abatement of real estate taxes. No cost given.

- The Greater Cleveland Regional Transit Authority (RTA) will construct a transit station on the RTA Waterfront Rail Line for the project “…all at no cost or expense” to the developer. No total or estimated cost mentioned.

- The City of Cleveland “shall take all necessary action to vacate all existing streets within the project site to the extent no longer require as public improvements for the project, and any easements which impair or adversely affect the development, construction or occupancy of the project, or which lie within the project site and are no longer required for use as public improvements for the Project.” No cost estimate given.

- The City of Cleveland“shall convey to the developer all the land owned by it (the city) within the residential site not necessary for publicimprovements by official quit-claim deed…” No cost estimate given.

- Under a section called “public improvements”, it states: “Public improvements necessary to support the Residential project will include but may not be limited to the following….

- Abatement, demolition and environmental remediation (including all necessary earthwork and soil clean-up) of the Project properties as they exist as of the execution date of this Agreement so as to allow for construction of the Residential Project.

- On-site paving and landscaping for all areas from the building lines of the Residential Project to the street curb as well as the public spaces of the RiverfrontParkdescribed below.

- A RiverfrontParkextending from the southern boundary of the Project along the CuyahogaRiver’s edge north to the Norfolk& Southern rail line with an eastern edge defined by a realigned Old River Roadand anew street network described below. The Park may include but not be limited to the following elements: a riverfront boardwalk, gather places; pavilions; project signage, retail kiosks; and a marina for transient boater use. The RiverfrontParkshall be planned in such a manner so as to receive the proposed extension of the Towpath Trail…

- Utility improvements, replacements and/or upgrades sufficient to provide necessary storm and sanitary sewer, water, electrical, gas and thermal heating and cooling services for the Residential Project and the permanent improvements in the public right of way (e. g. street lighting) and property (e.g. Riverfront Park fixtures and appurtenances) for ongoing and seasonal needs.

- Street improvements, realignments and additions to serve the Residential Project and its associated parking facilities, including all necessary traffic control equipment and signage…

- Bulkhead repair, replacement and improvements sufficient to maintain the long-term integrity of the eastern edge of the Project site bordered by the CuyahogaRiver.

- The Public Parking Facilities and Private Parking Facilities estimated to consist of a minimum of 1,600 spaces in total and sufficient to serve the retail and residential uses of the Project by way of four structured facilities and no fewer than two surface lots, including all necessary equipment, landscaping and appurtenances.

- An allocable share of land acquisition costs associated with the square footage occupied by the Public Improvement as a percentage of the entire Project square footage (Residential Project plus Public Improvements.)

- Any and all soft costs which may be attributable to construction of the Public improvements including but not limited to architectural and engineering services, lighting, traffic and parking consultants, permits/fees, testing and inspection, temporary utilities, financing fees and costs and capitalized interest on bonds or loans.

- And the city will wipe the ass of the developer whenever necessary.

Oh, that last one. That was just in my notes, not the 57-page agreement.

Do you see why I get upset at the Pee Deeand other news outlets and their tolerance of legalized civic corruption?

The Pee Deelast Friday praised the politicians under, “Progress (there’s that word) on the East Bank, an editorial that concluded by labeling the proposed project “an important cornerstone” and a testimony “that big thinking can pay off in Cleveland.” Can these people read?

Finally, let me have some calmer words. The City Hall visit gave me a chance to hear Councilwoman Fannie Lewis again. Fannie often displays the wisdom of a hard life lived.

I approached her as we both waited for an elevator. Age has caught up on her. I’m not sure she recognized me at first. She is bent by time but that’s physically. I believe she still could win re-election in Ward 7 even if she had passed.

I told her that I wished I had kept a record her truisms through the many,many years I’ve observed her at City Hall. She simply smiled.

She had spoken another gem that afternoon.

Fannie told the standard lineup of suits at the table when millions of dollars were being discussed...

“A hammer hurts whether it hits you in the hand or the head.”

Another of her homemade aphorisms. The context was about the power and damage of eminent domain.No price tag was attached to Fannie Lewis' advice.

Cimperman and his planning commission members and historic review people and other councilpeople and our mayor and John Carney of his port authority and all their hacks and wonks and the editors of the Plain Dealer and other media people in this region all together allowed the Wolstein Family to blight and bankrupt an entire district of Cleveland - the Flats - and then gave Wolstein our most valuable land, and our streets and public access, and demolished for him some of our most historic property, and gave him praise and money for it, and all for a stupid vapor-plan of $500/square foot condos attached to an exclusive boutique hotel and top-shelf retail and commercial, not needed (and in fact repugnant) during the real estate bubble and undesirable forever hereafter, with the only supposed tennant now ready to sign a lease being a law firm formed from the ashes of a law frim that screwed a bunch of office developers by ditching on leases around the country, when they went bankrupt.

We as a community should ask for the resignations of all people responsible for these stupid decisions resulting in these stupid outcomes.

What he needs to do is get over to Ward 13 in the Tremont area and clean up his CDC - earn his money and find out what he's paying out all those federal dollars for and I want to know what happened to the Walmat donations made to ease the mortgage burdens of low income people in Tremont?